On the Third Hand: Glass house


One econ major. Three (or more) opinions. One econ major. Three (or more) opinions.

The start of the public health insurance exchange program has been a pretty successful nightmare so far.

The Patient Protection and Affordable Care Act exchanges are using rickety websites that probably forward your data to identity thieves on offshore yachts to sell health plans with about five doctors in each market's provider network.

The typical family of three in New Jersey that fails to qualify for a subsidy would probably have to pay about $12,000 per year for the coverage, and, even with those huge premiums, might face an annual deductible approximately equal to the black-market sale value of the head of household's smaller kidney.

But those horrible plans and those horrible websites have, allegedly, managed to get 2.1 million people to pick plans. Millions of other people may still have vague thoughts of convincing HealthCare.gov that they really are themselves and getting coverage by the end of the March 31 enrollment period.

Some of the people who have picked coverage may even pay with checks that clear.

So, when I look at the PPACA exchange program as a program that's actually supposed to work, I'd have to give it a grade of, "Umm, are you serious? You really want a grade? Really?"

But what if one of the secret goals of at least some of the PPACA exchange creators was to get someone to give Aon, eHealth, GoHealth or some other private company the financial and regulatory help needed to create a big exchange that works?

What if some people hoped all along that the PPACA exchange system would be a prototype that would persuade health insurers to play ball, and to help the big private exchanges offer reasonably standardized policies with decent benefits, and without tons of underwriting hoops?

If I were grading the PPACA exchange system using the, "Is it good for the private exchanges?" rubric, my grade would be, "Not bad.'

On the one hand, the rise of any successful, big health insurance exchanges would be hard on the health insurance agents and brokers who are reading this blog, and I hate that. The health insurance brokers are clearly the nicest, smartest, best-informed, most candid people in the game. One of the joys of the problems at the state and federal exchanges is thinking about the shocked faces of the trust fund baby health policy wonks who thought they knew it all and had nothing to learn from the brokers.

No, sorry, wonks. You don't know how the health care system works. The people who know how it works are brokers and medical billers. The rest of you folks are just blowing smoke.

But, on the other hand, one of the things I notice about the problems at the exchanges is how wonderfully easy it is to write about the problems at the public exchanges. Website problems. Enrollment delays. Consumer complaints.

That's partly because reporters are looking hard at the exchanges right now, but it's partly because the exchanges are pretty transparent.

The U.S. Department of Health and Human Services' exchange enrollment effort is about as transparent as a brick wall. But, even for the federal exchanges, HHS publishes monthly activity data. Hostile vendors, state governors and insurance regulators find ways to get relevant documents into the public eye.

Managers of the state exchanges publish far more activity data and, in many cases, stream regular public hearings feature a parade of angry consumers and angry interest group representatives on the Web.

And all I have to do to find out how much all of those terrible bronze plans or surprisingly bad silver plas cost is to click a few buttons.

If I want to find out how much non-exchange plans cost, or anything at all about non-exchange plans, or problems with application procedures at non-exchange plans, I have to e-mail or call a lot of brokers, and hope they have time to get back to me, and hope they'll be candid, and hope they know what's going on outside their ZIP code.

That's partly because, to prevent antiselection, private health insurance shopping sites and plan issuers are making it hard to tell exchange plans from non-exchange plans, but partly because there's no easy way to tell what percentage of a state's non-exchange health insurers or non-exchange health plans show up in a private shopping site's results.

In the long run, increased market transparency might be hard on brokers, but I think it could be good for the health insurance market.

On the third hand, all that market transparency might be great for private exchanges that want to expand in the exchange market...

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